The Chair (Mr Norman W. Sterling): OK, I'm going to call the meeting to order. I recognize a quorum. We have a couple of substitutions today. Mr Yakabuski is here for Julia Munro, and the other one is Mario, but I'm not recognizing him as a -- no, we'll recognize him as well.

Mr Mario Sergio (York West): It's good to be here.

The Chair: As you know, we changed the standing orders this week, having the NDP have a member on the subcommittee. I believe we have a motion to appoint a member from the NDP to the subcommittee list.

Mrs Liz Sandals (Guelph-Wellington): I move that the membership of the subcommittee on committee business be revised as follows:

That Ms Martel be appointed in addition to Mrs Munro and Ms Broten.

The Chair: Any discussion? Any opposition? Carried.

SUBCOMMITTEE REPORT

The Chair: The second part of business that we're going to deal with today deals with our subcommittee meeting, which we had yesterday, which was attended by Ms Martel, even though I guess she wasn't formally a member of the committee. We were able to agree on all matters, so that there was no need for any kind of vote or anything like that in the subcommittee. We discussed those matters which we were going to examine from the auditor's report of last year, and we're going to be doing those discussions in February.

After some discussion, we settled on some dates in February for our hearings: Starting on February 9, sitting for four days of that week, from the 9th to the 12th; from the 16th in the next week to the 19th; then, because the Liberal caucus is having some kind of conference in Windsor from the 20th to the 22nd and some members may be staying in Windsor on the 23rd, we decided that we would sit on the 24th, being the ninth day of our hearings. So our present schedule is that we have four days from the 9th to the 12th, four days from the 16th to the 19th, and the 24th.

The House leader will be asking, I believe, today for this committee to have permission to sit 12 days. If for some reason we are unable to complete our business by the 24th, it would be likely we would be looking to go to the 25th. So I would just ask you to keep the 25th open on your schedules, as well as the other dates.

As we talked about before, we can substitute people in to the committee. This committee really doesn't lend itself well to substitution, because the writing of the report can come, in its final form, two or three months after we would have the hearings in February. So if you are going to be away, it will cause some difficulty in your participation later in the discussions on the report, because you won't be there first-hand when we have the deputy minister and the ministry in to explain what happened in the auditor's report.

That the committee will begin each section with a closed-session briefing by the Provincial Auditor and research officer;

That the deputy minister and other appropriate staff of each ministry will be asked to attend the committee, following the closed-session briefing, to provide a response to the auditor's report;

That, upon authorization by the House to hold meetings during the recess, the committee will meet February 9 to 12, 2004, February 16 to 19, 2004, and February 24, 2004.

The Chair: Any discussion at all?

Laughter.

The Chair: I wonder what they're debating.

As Chair, maybe I'm going to have my prerogative and turn off the TV.

Is there any discussion on this? These were the choices that the three parties made during our meeting. It was agreed to by all three parties.

Ms Broten: Mr Chair, on section 3.02 and section 3.03, I guess we will really be calling the current Ministry of Community and Social Services, given that Children's Services are moving out; the proper name would now be Community and Social Services.

The Chair: Laurel, you're moving that, are you?

Ms Broten: Yes.

The Chair: Is there any opposition? Will we carry that then.

The plan, in terms of the practicality of the meetings, is that we're planning to meet at 10 o'clock in the morning to start the meeting. We'll have a half-hour briefing by the auditor and then we'll call the ministry to be here. Normally the deputy shows up. They consider this a very serious process, so they will be here and they will be explaining what they've done to remedy the criticism in the auditor's report. Hopefully, at around noon we will break for lunch. Then we will come back in the afternoon. We will extend it, if there are still additional questions we want to ask of the particular ministry. If not, we will then talk with Ray and the other people involved in the research and discuss what kind of recommendations the committee might want to work around, what our summary of the particular meeting might be, and then, I'm told in previous years, normally we adjourn around 3 o'clock in the afternoon. That's the normal day here.

On Thursdays, we will probably be discussing -- as you can see on the motion that has been put in front of you, there's a motion for sections 4.08 and 4.09. These are "report backs" so that they are on previous auditors' reports that they're reporting back. They tend to be shorter in duration. The hearings and explanations tend to be more clean-cut because they are older in nature. We will be putting those on the two Thursdays, so we'll start at 10 on Thursdays. The plan is to have lunch either in an adjacent room or close to here, where we may be able to talk with the researchers about what we want to do out of that. So hopefully we can be out of here a little bit earlier than 3 o'clock on Thursday afternoons so you can go back to your constituencies a little bit earlier than normal.

That's sort of the way we envisage it happening. We could postpone the starting time on Monday if that is the desire of the committee. But all that does is sort of shove the day back and make it more awkward to work around.

We'll head toward the 9th at 10 am as our next meeting. Any questions or comments?

Ms Broten: Sure, I just wanted to speak to the motion. I have spoken with the House leader and I understand that the motion today will be to allow the committee to sit in the recess, but they won't be making reference to a number of days, so as to leave it absolutely open-ended for us.

The Chair: Yes. It's the committee that basically makes that decision. If we get into this and it goes shorter, we can shorten it. If it's tending to stretch out, we can stretch it out, but we would be limited to 12 sittings days or whatever the motion says, so the limit is the upper end.

Does anyone have any objection to asking for the time, the 12 days? I'm told that technically we should ask the House leader. We should have that from the committee.

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Clerk of the Committee (Ms Anne Stokes): Normally the committee makes a motion and then the House leaders would confer and then grant the time. This way we can work --

Mr David Zimmer (Willowdale): So are we going to ask the House leader?

The Chair: We've already done that informally. We had to do it because of the timing.

Mr Zimmer: And informally he said it's a go?

The Chair: Yes.

Any other questions? Feel free to phone the researchers or the research officers leading up to this, if you need any information or whatever. I look forward to some good hearings in February.

Mrs Sandals: Just one question: Will we get a schedule, then, of which ministry is which day, which section is which day?

The Chair: Yes.

Mrs Sandals: So as the time approaches, we'll --

The Chair: Because we only decided this yesterday, we'll try to accommodate, as much as we possibly can, the deputy ministers.

OK, thank you very much.

Jim, do you want to do an overview of how we're going to operate?

Mr Jim McCarter: We could give you an outline, too, of the type of material that we give you in preparation for the meeting and what the report is, if you'd like, for the new members. Would that be helpful for the new members?

Ms Broten: Sure.

Mr McCarter: I'll hand this off to Ray in a second, but what we typically do is, we work with research before every meeting and try to put together a fairly short briefing document for you -- we try to keep it to 10 pages -- which summarizes the material. On that particular section of the auditor's report, it highlights what the issues are, what the recommendation was, what the ministry's response was. Probably most importantly for each section, we do suggest a number of questions that you may want to use to ask the deputy -- and typically it's the deputy. Usually the assistant deputy minister comes and usually the program director comes, and often they'll bring three or four staff, sometimes as many as 10 or 20 staff, but usually they bring five or six staff. But we try to give you this.

What we do from sort of 10 to 10:30 is Ray and I will walk you through this document, try to give you an overview of what the major issues are and maybe from the auditor's perspective, if we have whatever, 10 recommendations, we may say from our point of view probably these three or four are the really big issues that you may want to focus on. But it's totally up to you. You may want to focus your questions on this. This is on corp tax. There may be other areas that -- you know, you're aware of issues just from your constituents that you may want to bring up. It's fairly open-ended. What we try to do is give you something to work with.

Then the questions go -- and you may want to jump in -- and then typically the committee would prepare a report like this that would be tabled in the House, and the committee would generally have a number of recommendations that they might make in addition to the auditor's report. Often in the front of this report there would be a statement that the committee endorses the auditor's recommendation and encourages the ministry to take action, but very often the committee will come up with some good, pragmatic recommendations.

This is issued and then I think the ministry gets either 90 or 120 days to respond back to the public accounts committee recommendations and then they would issue -- here's an example from Bob Christie, the deputy minister. He would come back -- and it's usually fairly detailed. Deputies come back then and say, "OK, here's the action that we have taken and here's what we plan on taking to address the committee's recommendations."

That is the full accountability route. From our perspective, having these discussions with the deputies is very helpful. It certainly encourages them to act on our recommendations.

Ray, do you want to add anything?

Mr Ray McLellan: Following up on Mr McCarter's comments, earlier on I think Laurel had asked about questions. These questions -- in the case of corporations tax, I think we're looking at about 10 pages. Essentially what happens is, it's really me sitting down and reading through the report and really identifying concerns that are glaring or where the ministry hasn't responded to the specific audit points, so they're very obvious points of concern. As Jim just said, we discuss this back and forth so that we've got a package that clearly captures his concerns as well as my concerns with respect to the auditor's report and the ministry's response to it.

What I would say, though, is that over the years the various caucuses would take this report and go off and pick their approach to it, so obviously you're not going to be locked into what these questions are. At times members use them, and I'd say probably 60% of the time they don't use them. They may read them and say, "That's a point of interest, but I'd like to embellish on it in the following way." So you're obviously not locked into these questions; they are little more than suggestions. I think it probably gives you a steering point, a takeoff point for where you want to go, so I think it's useful in that respect.

In addition to these possible questions, in the case of corporations tax, for which the report was tabled in June 2003, additional material was provided to this committee. Clearly, a copy of the audit report would be in there; parts from the public accounts 2001-02, because you want to refer to those numbers and figures; there might be press articles; Hansard excerpts from the House when this was being discussed over the last couple of years, so you can go back to see what the issues are -- so that's certainly of assistance; parts from the estimates briefing -- I don't know if you've spent much time looking at them, but they're useful in terms of laying out on a program-by-program, line-by-line basis exactly what the various ministers are up to, so that's useful material; also we've included, in recent years, parts from the ministries' business plans -- that's worth having a look at, it's a starting point and I think it collects a lot of information together; and lastly, some information from the ministry's Web site on corporation tax, for example, the components of Ontario corporate taxes, non-compliance and collections. So there's enough information to get you started. If you want, as the Chair just said, you can certainly come back to us and say, "It's fine, but I really want to pursue this aspect of corporation tax." That's an open-ended process.

The other thing we do is follow up. For example when we were looking at corp tax last year, the government released a news release on February 10, 2003, by the previous government with respect to tougher tax collection measures. So when there is follow-up from the ministry following the release of the auditor's report, we'll certainly make sure you get that material, if it's a press release or a statement in the House. When the deputy, Mr Christie, is before this committee, it's typical for the deputy to start off and probably spend 15 minutes on an opening statement. So that basically sets the groundwork of what has happened, and at times they'll just run through the auditor's recommendations 1 through 12 and say, "We've taken the following action." They may provide a document like this for the committee, so you'll have something to refer to when you're following up on your questions. That's quite typical as well.

The other thing I would say is that during the hearings the ministry is never able to answer all of your questions, but what we do is to make sure we've got a running list of what we've asked them. In this case, we asked the minister to get back with a response to eight or nine or 10 questions with respect to corp tax. This information is critical to go into your report, and you may give legislative research instructions and say, "I want you to deal with (a), (b) and (c) in these follow-up questions." You may disregard some of them; that's your call. So that's supplementary information will come in. It's important to ask them -- for example, during the hearings if you can see that they're not able to deal with questions or material hasn't been presented -- "I'd like the ministry to provide the following information with respect to corporate tax between 1995 and 2000." You can do that. You can have a list of questions you're interested in.

As far as the actual committee report, as Mr McCarter had said, this is what the final product looks like. It will come to you from legislative research as a draft document, a confidential document for committee purposes. But as I think I said at an earlier meeting, prior to us actually sitting down and going through this report, this will have gone through the Provincial Auditor's office, so you have the confidence and assurance that what's in this draft report has gone through Jim McCarter's office, through his director's office responsible for corporations, so we have a level of confidence that what's in here makes sense from an audit perspective as well as from obviously the hearings, because I've had a look at Hansard. As Jim also said, following the tabling of this document in the House, within 120 calendar days we have a response.

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The only criticism that I would make, and concern that I would voice about the process is -- and John Gerretsen, when he was on the committee over the last five years had raised this point on numerous occasions -- we get the response on a line-by-line basis to our report. For example, they deal with recommendation 3 and what the ministry has done, so that the closure on the accountability is very good as far as I'm concerned.

The hole in the whole process is that as a committee we never have the time to finally get back to this 120-day response. Time runs out on us. As I think the clerk said a few days ago, we never get to the point, in probably 90% of the years, of actually finishing off all of our reports. Time passes us by. This is the weakness.

The positive part of it is that the Provincial Auditor, when he does his chapter 4 follow-ups in two years, 24 months from finishing the hearings, would have a look at this as well as having a look at our report and recommendations and incorporate that into chapter 4. But as a committee, we never really get back to do this. Whether or not that's terribly important is up to the committee to decide, but it's something that over the years I've had a concern about. Anyway, we'll leave that with you and you can decide where you want to go on that.

Mr McCarter: If I could just add to that, when we go in to do our next auditing program area, if Bob Christie has said, "We've taken this action," and they haven't, we point that out very clearly in the report, that when the ministry came back in response to the public accounts committee they said they were going to do this and it was not done. We make sure that we do follow up the next time we do the audit.

The other thing that I'll mention, just for your interest, is that it's helpful to Ray that -- when we finish the hearing, often it's good to have a bit of a discussion in the committee to provide some feedback with respect to helping him draft the report: What type of recommendations do you want to make? I should say, I know Ray mentioned that the draft report goes back to us. I do want to make it clear, though, that it's your report, it's your recommendations.

We more or less check it for factual accuracy, but there could be a situation where we might make a recommendation, the ministry might agree, you might listen to the two points of view and at the end of the day your recommendation may be something different than what we've recommended. So be it. We're not approving or vetting your report in any way. It's your report; it's your recommendations. We check the facts and everything, but it's your report.

Mr Zimmer: Mr McLellan, if that's the flaw or your criticism, what would you recommend, or what are your thoughts on addressing that flaw so we can come back to it? Because that is obviously a key piece of the exercise.

Mr McLellan: In my view, the committee should, in the fall of the year -- in other words by next fall, prior to the auditor's report coming out for 2004, it would be useful for us as a committee to look at those responses. In other words, even if it's the members taking the response away and looking at it and saying either, "Essentially we're happy with it," or, "We're not happy," they may want to do something in a supplementary way. I don't think it needs a lot of time, that part of the equation, but I think it needs some time for us, at least as a committee, to look at it and say, "Yes, we're happy with it," or, "No, I think a letter should go off to the ministry with respect to recommendation 8 on corporate tax, and ask them to move further in this direction," or maybe they're not moving fast enough. I think that would be helpful.

Mr Zimmer: Again -- you'll have to help me with this -- would it be appropriate to ask the subcommittee to address that issue of how we can come back to it, in that when the subcommittee is planning --

The Chair: We can look at it. It's pretty early in the process. I guess that decision would be in September, as to whether or not we could react or how we would react and that kind of thing. Anne, did you have something?

Clerk of the Committee: I just wanted to say that the committee at any time can review its progress and see how it's doing and you might want to move ahead with something or jump to something else. There's an opportunity at any time to do that, to make those decisions.

Mr Bill Mauro (Thunder Bay-Atikokan): I'm just wondering -- you mentioned about the briefing document, that it's confidential. Will that document be Purolated to the constituency offices out of town, or will it only stay here? I know in one of the other committees there's a problem, or some reluctance, to Purolate out confidential documents. I'm just wondering if I'm going to have that when I'm in Thunder Bay or if I'm going to have to come to Toronto to access it.

Clerk of the Committee: My office does the distribution of the material. We would just check with you where you would prefer to get your material.

MrMauro: So there's no issue around sending it to --

ClerkoftheCommittee: Sometimes we are sending out information on a weekly basis. Then, depending on what your schedule is, you may prefer to have it that week, in your Queen's Park office or --

MrMauro: Perfect.

One other question: Historically, has there been any legislation referred to this committee or has it always just simply to review the --

TheChair: There has been, from time to time, but there's none now.

MrMauro: None now, but that still can change?

TheChair: It can always happen to any committee of the Legislature. The House can basically decide on that.

MrMauro: The third and last question for me: I see that we are scheduled to do two weeks, the 9th to the 12th, the 24th. I'm just wondering if the committee is open to the suggestion of perhaps seeing how it evolves in that second week and having a determination made as to whether we are getting close to the end of the work, and rather than coming back that week for one day, trying to fit it into the previous week?

TheChair: The reason I recommended the schedule as it is is that on the Monday the 23rd we have the Ontario Good Roads Association convention here in Toronto. You may want to be here for that anyway. The idea was that when we were going to have a short week, maybe one day or whatever, you might want to be in town anyway for that other function. It may not be a problem. We can try to work it through as we get into that second week as to what's happening with regard to the overall schedule.

MrMauro: Then the AGM for us is the 20th in Windsor.

MsBroten: Yes. So that's why we didn't want to be sitting the Monday, because there's an expectation among some folks that we'll be booking meetings in that area on the Monday.

MrMauro: So the only other thing would be perhaps if we sat longer the first week, then that would perhaps get around it. Anyway, it's just something that maybe we can keep in mind.

TheChair: We can't shift meetings unless we have proper notification, because the people we are asking here have busy schedules as well. But we'll try to work through that and see how it's coming.

ClerkoftheCommittee: If I can just add to that, we normally schedule one section per day, so it's one deputy minister per day. If we shortened up, it would be a matter of changing all of their schedules as well. It can be done, and it does happen, where the committee decides that they would like to reschedule something. It certainly has been done, but I would start contacting them now to set up those dates.

TheChair: Can I ask a question here? In spite of the fact that I've been around here a long time, I've never actually sat on this committee during its deliberations. One thing I have always stood for -- and I actually remember one committee some time ago where a Chair or a committee tried to quieten a member as to what he was going to say or wasn't going to say. Of course it's just wrong. Each of us has the right to say whatever we want, but there is a good chance there will be a fair bit of press. It's a slow time of the year, there may be not a lot going on, so the press is going to be here. What are the options in terms of members and how they respond to press with regard to matters that might be raised at the committee? My concern always is when we're talking about deputy ministers and those kind of people. Everybody has to work with these people. There is an ongoing relationship that everybody has with them whether you're in opposition or in government. I'm not saying to any member that you can't go out and say whatever you want to say, but what are the options that normally would be put in front of a member when he or she is confronted with that microphone when they walk out there?

ClerkoftheCommittee: The auditor's report, of course, is a public document. When we conduct the public hearings, they are public, so they are open, so anything that is discussed at that time is a matter of public record anyway. Generally, before each briefing by the deputy ministers, the Provincial Auditor will provide a half-hour briefing that we do in a closed session. Generally, the report writing itself, which we would start once the House comes back in March, is done in closed session as well. It's done in closed session because the permits for the kind of full and frank discussion of some perhaps sensitive or touchy issues that you may not want to engage in in public. The report itself is kept confidential until it's actually adopted and tabled in the House.

In that respect, anything that any member would want to discuss with the press -- of course they are free to discuss whatever they wish with the press. Certainly anything that has been raised in public would be open for discussion, but we would ask that anything that has been discussed in closed session or to do with the report the committee is preparing would be kept confidential because it can change. You might be making announcements about something and the committee may decide at a later date that something new has come up and they may decide to change those recommendations or they may change the focus of the report. It serves most purposes well to keep it confidential.

But other than that, there's certainly no restriction. Certain members would have perhaps more of an interest in certain topics than in others, so they may wish to pursue a line with the press or the press may go after somebody who's [Inaudible]. The only restriction would be just as you would normally have with any matter that you would deal with anyway, that I can see.

Do you have anything to add, Jim?

Mr McCarter: No. It will depend on the topic, but most of the stuff in the auditor's report is public. It depends on the topic whether they come or not. Recently in the past there haven't been that many media at the committee meetings. You're right that it's a slow time where they may be looking for something.

The Chair: Any other business? We'll see you here in February. Thanks very much.